A competitive state rewards program that recognizes municipalities for cutting operating expenses to hold down taxes has picked Nassau County and East Hampton town as two of the 13 local government agencies statewide to share a $12 million prize.

The awards were announced Wednesday in a news release. Nassau received $5 million for converting several of its eight police precincts into community policing centers, eliminating more than 100 jobs, which County Executive Edward Mangano predicted would save $20 million a year.

East Hampton was awarded $536,425 for "re-engineering town government," merging 26 town departments into 13 and saving $4.2 million a year, which allowed the town to cut its tax levy by 18 percent. Local residents had opposed both actions, but Secretary of State Cesar A. Perales, in a prepared statement, said the competitive awards would stimulate creativity by elected officials statewide. "The big winners are the taxpayers . . . " he said.

While the grant to East Hampton is only a tenth of the funds going to Nassau County, it represents a far larger share of the town's $69 million budget than $5 million does in Nassau's $3 billion budget.

There is still a debate over how deeply in debt Nassau County may be. The county said it ended the year with a budget surplus, although the county executive's staff projects a possible budget deficit of $275 million between 2014 and 2016.

Still, Mangano said he appreciated the recognition of his efforts. "I commend Gov. Cuomo for recognizing my administration's efforts to reduce the size of government by eliminating duplicative services," he said through a spokeswoman.

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The bitterness of Nassau residents who saw their local precincts close didn't match that of East Hampton, where -- following cuts in town staff and services -- incumbent Supervisor Bill Wilkinson decided not to seek re-election.

In his budget message for 2013, Wilkinson noted that, "Our decisions were not always popular, and many of these decisions were met with opposition and ridicule from certain segments of the local population . . . East Hampton is in a much better position to face the future financially than it would have been if the tough decisions were not made early and decisively."

The state grants will be given out in equal parts over three years "contingent upon continued demonstrations of savings," state officials said.

Wilkinson warned that his town board is already looking at ways to spend additional funds because the town will end the year with a surplus.

"That's the kind of activity that got us into trouble in the first place . . . I put a red circle around safety and security issues [but] there are other items we can no longer afford to do. We have to weigh the wants and the musts," he said.